27 Apr What’s Important to Brag About
It happened again. I was listening to a great panel discussion on cultural resource management (CRM) sponsored by the University of California Berkeley’s Archaeological Research Facility. One of the panelists self-introduced themselves as working for the largest CRM firm in the U.S. Not only was this not true in this case, it showed how still prevalent the lack of business knowledge is in commercial archaeology.
The success of an organization, any organization, can be measured in many ways. In the heritage world, we like to measure things like the impact our organizations have, what we have learned about the past, or using the results of our work to shape public policy. Financial sustainability also is important. In fact, without it our organizations cannot achieve their other goals. What does financial sustainability mean? It means that an organization is growing in value. Thus, value growth is the most important financial metric.
Size, as it is typically referenced by CRM firms, means revenue: the top-line income that a firm receives. What the archaeological panelist did not understand is that revenue has nothing to do with value. It does not matter if your firm brings in $1 million or $20 million in revenue, what matters is how much is left over at the end—the free cash. A $1 million revenue organization can certainly have more free cash at the end of the year than a $20 million revenue firm. If so, that $1 million firm is more sustainable, more valuable, and potentially has more resources to invest in making an impact.
Let’s change our vocabulary to brag about the things that matter. I look forward to the day when I hear an archaeologist introduce themselves as working for the most financially sustainable firm in the U.S.